Report: Microsoft Picks Nadella As CEO, May Replace Gates As Chairman

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Microsoft is getting ready to name Satya Nadella, executive vice president of its Cloud and Enterprise Engineering Group, to replace Steve Ballmer as CEO, Bloomberg reported Thursday, quoting sources "briefed on the process."

Microsoft's board is also considering replacing Chairman Bill Gates, with John Thompson, lead independent director, emerging as a candidate, according to the Bloomberg report.

Some candidates Microsoft has talked with about the CEO job have concerns over the influence Gates and Ballmer could exert if they keep their seats on the company's board, the Wall Street Journal reported earlier this month.

Nadella joined Microsoft in 1992 and was named head of the Server and Tools division in 2011. His LinkedIn profile still lists him in that role, but his title changed in Microsoft's corporate re-organization in July.

Nadella has been one of the leading internal candidates during Microsoft's CEO search. He's the main architect of Microsoft's cloud computing strategy, often explaining in public appearances how Microsoft has learned much from running mega-scale Internet services like Office 365, Bing and Outlook.com.

One of Nadella's biggest achievements was leading Microsoft's Server and Tools business to $19 billion in revenue in fiscal 2012. His impressive track record suggests he'd be an excellent CEO, several partners told CRN.

Rand Morimoto, president of Convergent Computing, an Oakland, Calif.-based Microsoft partner who has worked directly with Nadella previously, described him as "very smart and very likeable," as well as savvy about the cloud and data center issues that partners are facing in this segment.

Ric Opal, vice president at Peters & Associates, a Microsoft partner in Oakbrook Terrace, Ill., said choosing Nadella would help Microsoft avoid the learning curve that would come with the hiring of a CEO from outside the company. "Given that Satya was part of the restructuring [in July], now the restructuring can accelerate," he told CRN.

Chris Hertz, CEO of New Signature, a Washington, D.C.-based Microsoft partner with a substantial cloud business, told CRN he'd be thrilled if Nadella ends up being the pick.

"Elevating an in-house candidate provides continuity and stability, which as a partner, I greatly appreciate," Hertz said in an email. "If Satya becomes CEO, I think our prosperity would not only continue, but would likely be accelerated. "